Husky Energy Inc. cumulative redeemable preferred T.HSE.PR.B

Vote No to Share Conversion - Reasons Explained

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I just want to post again here all the reasons to vote your proxy forms, and to vote NO. I haven't voted with proxy forms often, but it hasn't been too difficult the few times I have. The Proxy voting forms should be arriving soon. They may come electronically or in the mail. (Thanks User CanSiamCyp)

Reasons to Vote No:

1) James Hymas, Canadian preferred shares expert, has advised shareholders to vote no. He thinks they should wait until better terms are offered. His post and additional comments are available here: https://prefblog.com/?p=41503#comments

2) Husky cannot be rolled into Cenovus without purchasing the preferred shares. This has been confirmed by James Hymas, and by User Husky4000. There have been previous court cases where issuers had to redeem preferred shares at $25 after a merger of companies. See the attached court ruling posted by Husky4000: https://canlii.ca/t/g146m

3) If the pref shareholders vote no, Cenovus must maintain Husky as a separate subsidiary. There will not be the proposed savings realized by joining the companies. Issuing debt and buying back the Husky pref shares for $25 is the better economic decision for Cenovus, especially given current interest rate levels. 

4) A similar situation arose during the merger between RONA and Lowe's. Lowe's eventually decided to purchase the outstanding RONA preferred shares for $24, which was agreed to by the shareholders. The article describing this situation is here:  https://financialpost.com/news/fp-street/injustice-for-my-fund-holders-fidelity-explains-its-compromise-decision-to-sell-rona-preferred-shares

5) There is no advantage to voting yes and receiving Cenovus preferred shares. In fact, there may be a credit downgrade of the shares if this happens, as described in the James Hymas post above. 

There are probably more reasons, but that seems to be more than enough for me. Wait for your $25 (or at least a better price than current market value)

Thanks to contributing to the discussion Husky 4000, Rad10, mrbb, CanSiamCyp, and of course RagingBull3 (and others)
 
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